After several lean years, venture capital investment in energy storage technologies is soaring. In 2007, Makers of batteries, capacitors, fuel cells, energy harvesting and related products raised total funding of $709 million, up 74% from the previous year, according to a new
report from Lux Research Inc. By comparison, during the tech boom venture investors put $201 million into alt-energy and power companies, before funding bottomed out out at $77 million in 2001.
Of course, energy storage encompasses a range of technologies applicable to a wide variety of products across many industries. That complexity is one reason why, unlike, say consumer Internet firms, energy storage startups often fly under the radar.
Where's most of the money going today? By far the leaders in attracting VC are battery specialists, which raised more than $426 million last year, compared with roughly $142 million the previous year, Lux says. Next in the capital chain are fuel cell makers, which drew some $206 million in 2007, although that figure is down from $246 million in '06.
By contrast, profits on these investments have been harder to come by. Roughly 17% of VC-backed energy storage companies have gone public since 1997, generating a modest 4.5 times average cash-on-cash return to investors. Venture-funded startups that were acquired during that period, which amount to 6% of the sector, fared much worse, yielding a miniscule 0.8 times return on investment. Of the remaining players, 69% are still kicking, while 9% are inactive. -- Alain Sherter
See findings from Lux Rearch's new report on alternative power and energy storage
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